Oil slips below $96 as fears over Syria ease

The price of oil edged slightly lower Tuesday as fears over Israeli involvement in Syria’s civil war eased.

By early afternoon in Europe, benchmark oil for June delivery was down 46 cents to $95.70 in electronic trading on the New York Mercantile Exchange.

The Nymex contract rose 55 cents to close at $96.16 per barrel on Monday after news of an Israeli military strike in Syria raised concerns of an expanded conflict in the oil-rich Middle East.

Over the weekend, Israel launched an airstrike in Syrian territory that reportedly targeted weapons intended for Lebanon’s Hezbollah militia, an ally of Syria and foe of Israel.

Carl Larry of Oil Outlooks and Opinions said traders were “not even thinking twice about the imminent threat.”

“There’s always a threat to oil production and we should have this figured out by now,” he said in a commentary.

Brent crude, which is the benchmark for international oil varieties, was down 58 cents to $104.88 per barrel on the ICE Futures exchange in London.

Reports that Saudi Arabia continued to increase its crude output in April, to around 9.3 million barrels a day, also weighed on prices, as the higher production was seen adding to already ample stocks.

“Following the end of maintenance work in the refineries, demand grows for seasonal reasons and is offset by higher supply,” said a report from Commerzbank in Frankfurt. The added Saudi output “makes it more difficult to reduce the oversupply and allow the oil price to recover, however.”